Equities
Canada’s main stock index gained at Thursday’s opening bell, boosted by strength in healthcare and tech stocks along with improved global risk sentiment. On Wall Street, the tech-heavy Nasdaq jumped 2 per cent in early trading in the wake of strong results from Facebook owner Meta.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 41.07 points, or 0.2 per cent, at 20,792.12.
In the U.S., the Nasdaq Composite gained 248.83 points, or 2.11 per cent, to 12,065.15 at the opening bell. The Dow Jones Industrial Average rose 36.34 points, or 0.11 per cent, at the open to 34,129.30, while the S&P 500 opened higher by 39.47 points, or 0.96 per cent, at 4,158.68.
On Wednesday afternoon, the Federal Reserve raised U.S. interest rates by a quarter percentage point and offered little indication that a pause was in the offing. However, Fed chair Jerome Powell also said it was “gratifying to see the disinflationary process now getting underway”, offering some hope that price pressures are easing.
“That was the major - and the only take - of his speech yesterday, and sent the markets rallying,” Swissquote senior analyst Ipek Ozkardeskaya said in a note.
“But besides the ‘disinflationary process’, things went quite according to the plan at yesterday’s FOMC meeting,” she said. “The Fed increased the interest rates by 25 basis points, as expected. Powell said that they are happy with the falling inflation, but warned that the U.S. jobs market remains tight, and wages growth is still too strong.”
On Thursday morning, the ECB raise rates by half a percentage point, matching market forecasts. The central bank also signalled a similar move at its March meeting.
“The Governing Council intends to raise interest rates by another 50 basis points at its next monetary policy meeting in March and it will then evaluate the subsequent path of its monetary policy,” the bank said.
On the corporate side, shares of Meta jumped about 18 per cent in morning trading after the Facebook parent cut its cost outlook for 2023 by US$5-billion and forecast first-quarter sales that could top Wall Street estimates. It also said its investments in AI-surfaced content and TikTok short video competitor Reels were starting to pay off.
After the closing bell, more tech giants are scheduled to release their latest quarterly results. Alphabet, Apple and Amazon are all scheduled to release earnings later this afternoon. Ford and Starbucks are also on deck with their most recent earnings reports.
In Canada, telecom results come into focus with earnings this morning from Rogers Communications and BCE Inc.
Rogers is now awaiting federal approval for its $20-billion deal to buy Shaw Communications. The Globe has reported that Federal Industry Minister François-Philippe Champagne is asking Rogers and Quebecor Inc. for firm commitments to maintain affordable and accessible wireless service after their planned transactions, including signing written undertakings that impose consequences if the companies fail to keep their promises.
In its latest quarter, Rogers beat revenue forecasts. Total revenue increased 6 per cent to $4.17-billion in the quarter ended Dec. 31, inching past analysts’ average estimate of $4.15-billion, according to Refinitiv data. Profit in the quarter rose 25 per cent, helped by gains in the company’s wireless division. Shares were up more than 1 per cent on the results shortly after the opening bell in Toronto.
BCE, meanwhile, reported net earnings attributable to common shareholders of $528-million or 58 cents per diluted share in the fourth quarter, down from $625-million or 69 cents per diluted share a year earlier. Total operating revenue totalled $6.44-billion, up from $6.21-billion a year ago. BCE also said it expects its adjusted earnings per share for the year to be down 3 per cent to 7 per cent compared with 2022 due to lower tax adjustments, higher depreciation and amortization expenses and increased interest costs. Revenue growth for the year is expected to be between 1 per cent and 5 per cent. Shares were down more than 2 per cent in morning trading.
Overseas, the pan-European STOXX 600 was up 0.92 per cent by midday. Germany’s DAX and France’s CAC 40 gained 1.58 per cent and 0.64 per cent, respectively. Britain’s FTSE 100 gained 0.90 per cent. Early Thursday, the Bank of England delivered its tenth consecutive rate hike, raising its bank rate to 4 per cent from 3.5 per cent.
In Asia, Japan’s Nikkei finished up 0.20 per cent. Hong Kong’s Hang Seng lost 0.52 per cent.
Terry Weber